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Free trade and the environment – evidence from Chinese cities

Published online by Cambridge University Press:  20 October 2020

Yunzhi Zhang Open the ORCID record for Yunzhi Zhang [Opens in a new window]
Yunzhi Zhang*
Affiliation:
Department of Economics, Jinan University, Guangzhou, China LEO, University of Orléans, Orleans, France
*
*Corresponding author. E-mail: yunzhi.zhang@hotmail.com
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Abstract

This paper studies the impact of trade openness and the proportion of exporters on environmental quality through the scale, composition and technique effects from 1998 to 2007 using firm- and city-level data for 287 Chinese cities. Our results reveal that, on average, trade openness has a detrimental impact on the environment in Chinese cities, but this impact remains heterogeneous across regions. A higher proportion of exporters improves the environment in central and eastern cities while generating nevertheless more pollution in western cities. As regards the sector-specific impact, we find that the higher proportion of exporters in the mining and less-polluting manufacturing sectors in eastern cities diminishes the emissions of particulate matter 2.5 (PM2.5). Our finding also suggests that a pollution haven effect emerges in China at the city level. Finally, our results confirm the presence of an environmental Kuznets curve effect for the PM2.5 pollutant across Chinese cities.

Keywords

Chinacity-levelenvironmentfirm-leveltrade openness

JEL classification

F18: Trade and Environment Q53: Air Pollution • Water Pollution • Noise • Hazardous Waste • Solid Waste • Recycling
Type
Research Article
Information
Environment and Development Economics , Volume 25 , Special Issue 6: The Environment, Resources and Pollution – New Challenges for Economic Development , December 2020 , pp. 561 - 582
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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